Assignment.

a$.$ You are advising a company on two potential projects, Project A and Project B$.$ Project A requires significant debt financing, while Project B involves an equity investment. Explain how you would use the APV method to evaluate the projects, considering the impact of leverage and the associated tax shield.

b$.$ Imagine a manufacturing company is considering expanding its operations by acquiring a competitor. Outline the steps involved in applying the APV method to assess the financial viability of the acquisition. What specific factors would you consider in estimating the tax shield?

c$.$ Discuss the importance of conducting sensitivity analysis when using the APV method. Provide an example of how changes in key variables, such as the discount rate or debt levels, can affect the overall valuation of a project.

d$.$ Discuss the concept of using free cash flow for company valuation. How would you apply the discounted free cash flow $($DCF$)$ method to determine the intrinsic value of a company? What challenges might arise in this valuation approach?

e$.$ Explain how free cash flow analysis can be used to assess a company's vulnerability to financial distress. Identify key indicators in the free cash flow statement that might signal potential financial difficulties for a company.

f$.$ How is free cash flow related to a company's sustainable growth rate? Discuss the significance of free cash flow in supporting a company's ability to fund its growth through internal resources.